Andy Xie is a closely watched and widely respected commentator on China. He doesn't pull his punches and he is close to what is happening on the ground.

What he says is startling and sobering.

If he is right, China is on the verge of a bursting of its property bubble and a major economic downturn.

Hold on to your hats, especially if you are stuck in the mindset that says China will bail out New Zealand and Australia again. I'm looking at you John Key.

Many local governments cannot pay their bills. Numerous cranes stand still amid half-completed property projects. Half-shut factories are visible everywhere. Steel and coal prices have dropped by one-fifth in six months. Local governments are squeezing businesses, even asking for tax prepayments, to meet their revenue targets. But the official data still shows good growth in gross domestic product. Many businessmen have told me that their governments ask them to misreport data, including electricity consumption, to hide the depth of the slump.

Few numbers are trustworthy. The main cause is the bursting of a speculative bubble that centres on property. China's property bubble went nationwide in 2006. The twin shocks of the stock market bubble bursting in 2007, followed by the global financial crisis, hit property hard. Beijing then instituted a credit expansion that revived the bubble. It convinced speculators the government had the ability to revive the bubble at any time, so many doubled down and borrowed massively.

The bubble has engulfed all financial activities since, not just the banking system. Equipment and materials suppliers and construction contractors have become financing channels for local governments and property developers. Trust companies issued trillions more in loans that were used by property developers or local governments. There is a massive underground loan-shark industry at the bottom of the risk curve, that is now bursting everywhere.

According to the housing ministry, urban living space reached 30square metres per person in 2009, with 33square metres for rural residents. Threebillion square metres of urban residential buildings have been completed between January 2010 and May this year, and 3.4billion square metres is under construction, according to the National Bureau of Statistics. If we stick to 30 square metres per person, 6.4billion square metres could house 213million people. If China stops building, there would still be enough housing for the urban population peak, bearing in mind that China's population is expected to start declining around 2020.

When trust takes a holiday, creditors find no comfort in capital ratios. The banks’ opacity makes it impossible to verify if their capital ratios are as high as advertised. Finally, in suggesting that bad banks will be left to sink or swim, the commission raises the risk of financial collapse in times of crisis. If the bad banks’ bad customers actually believe the commission’s intimations that their credits will not be honoured, they will exit at the first sign of trouble. As a result, the instability of the bad banks and the entire financial system will increase.

For all the good intentions and hard work of its members, the commission protects neither good nor bad banks. Nor does it protect the public from the failure of opaque, leveraged banking. What the commission protects are the bankers, who, apparently, are too big to cross.

Private sectors are running large surpluses of income over spending. In the US, the financial balance of the private sector turned from a deficit of 2.4 per cent of GDP in the third quarter of 2007 to a surplus of 8.2 per cent in the second quarter of 2009. This massive shift would surely have caused a huge depression if the government had been unwilling to run offsetting fiscal deficits. That is how the depression was contained.

The big story continues to be one of private sector de-leveraging, tempered by easy monetary policy and offset by the leveraging of the government’s balance sheet. The willingness of the authorities to do both of these things, despite foolish criticism, prevented us from experiencing a second great depression and continues to do so.

Call it the “Machinebrain” picture of the world: markets are perfectly efficient, humans perfectly rational, incentives perfectly clear and outcomes perfectly appropriate. From this a series of other truths necessarily follows: regulation and taxes are inherently regrettable because they impede the machine’s optimal workings. Government fiscal stimulus is wasteful. The rich by definition deserve to be so and the poor as well.

This self-enclosed metaphor is the gospel of market fundamentalists. But there is simply no evidence for it. Empirically, trickle-down economics has failed. Tax cuts for the rich have never once yielded more net revenue for the country. The 2008 crash and the Great Recession prove irrefutably how inefficient and irrational markets truly are.

What we require now is a new framework for thinking and talking about the economy, grounded in modern understandings of how things actually work. Economies, as social scientists now understand, aren’t simple, linear and predictable, but complex, nonlinear and ecosystemic. An economy isn’t a machine; it’s a garden. It can be fruitful if well tended, but will be overrun by noxious weeds if not.

In a system that still calls itself communist but thrives on cut-throat capitalism, a group of powerful political families and their hangers-on have become fabulously wealthy while ignoring the rules and laws they set for the rest of society.

“Powerful political families have come to control vast swaths of the Chinese economy in an environment where there is no separation of powers, no independent judiciary or media and the government sits astride everything,” says Professor Andrew Nathan of Columbia University, co-editor of The Tiananmen Papers, a collection of leaked secret documents detailing top-level decision-making during the student protests. “The law is controlled by the Communist party so whoever controls the party can use the law for whatever they want – these people are far above the law.”

“In the 1990s most senior leaders at least tried to moderate their princelings as they got rich but now there is almost no restraint and it has got out of control,” says a leading Chinese financier with close ties to the party leadership. “This is the single biggest test of the legitimacy of the party.”

The chief executives of three multinationals with decades of experience operating in China told the Financial Times that engaging relatives of senior officials as consultants or as joint venture partners was standard practice – and, in fact, vital in many industries. They said these princelings usually preferred to hold stakes in joint ventures through a holding company in Hong Kong or the Caribbean, where Chinese anti-corruption investigators cannot find them.

Consulting fees are often paid in places such as Dubai or Hong Kong, and agreements are frequently written on red paper because photocopies or scans show up black, making it harder for them to be circulated widely, these people said. In some cases, these relatives are introduced as highly paid consultants at the end of the negotiation process, and their sudden appearance is usually taken as a sign that the deal will go ahead.

These chief executives and others said that, as China’s economy has grown and the opportunities for enrichment have multiplied, it has become much harder for foreign companies to recruit or gain access to the relatives of the most senior officials. “These days, a foreign bank would be lucky to get a kid whose father was a vice-minister,” said one senior executive at a western bank in China. “The big families want to go into private equity or do business themselves be­cause that’s where the real money is.”

Bank of England governor Mervyn King, who last month said the world was barely half way through this crisis, now speaks with almost biblical foreboding of the big "black cloud" of uncertainty hanging over the world.

And King's is not the darkest voice out there. Hedge fund manager Jamil Baz from GLG Partners claims the western world's deleveraging, or debt reduction, process could take another 15 to 20 years if the ratio of economy-wide debts to gross domestic product (GDP) in the United States and Europe is to be cut to anything like sustainable levels.

It's not easy but its the best option for many of those who want to get a permanent visa for Brazil, and it seems like a lot of people want to work in Brazil, where unemployment rates sit currently at 5.8%.

"I’m a bit afraid, but I know three Germans in Rio and an American in São Paulo who did the same," 31-year-old Spanish student tells Fohla De S.Paulo. "I could look for a job in Germany, where I was before I lost my job. But Europe is getting worse and worse, while the situation here is just the opposite.”

Up ’til the ’70s, debt-to-GDP grew more slowly than industrial production. That is healthy and sustainable. While the total market debt may grow in tandem with GDP, and with industrial production — indeed, this can be the case even under a gold exchange standard (as the gold supply increases) — there is no sensible reason for the ratio of debt-to-GDP to grow faster than industrial production. Indeed, this is symptomatic of just one thing — consumption without income, enjoyment without effort, living beyond the means of productivity. This is just an unsustainable bubble.

As the ’90s turned to the ’00s and the United States gains in industrial production ceased to accumulate, while GDP and most concerningly (and hilariously) while the debt-to-GDP ratio continued to increase. This was classical bubble behaviour, and the end came very poetically; the recession and the industrial production collapse hit just as growth in the debt to GDP ratio (as indexed against 1953 levels) finally surpassed growth in industrial production. Indeed, I hypothesise that a very strong indicator of a Minsky moment — when excessive indebtedness forces systemic deleveraging, leading to price falls, leading to widespread economic contraction — is the point when long-term growth in the debt-to-GDP ratio exceeds long-term growth in industrial output.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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78 Comments

Oil, like all globally traded commodities, is priced at the margin, meaning that the costs incurred in satisfying the last barrel of demand (finding, drilling, fracking, transporting, etc) represents a floor to prices. If a producer can’t sell that last barrel for more than it cost him to produce it, he won’t make another one, right?
Well, there’s still a lot of cheap oil in places like Iraq that can be brought to market for less than $20. Yet according to the analysts at Bernstein Research, themarginal cost of producing a barrel of oil was $92 in 2011. This might seem high, but it makes sense when you consider that ever more supply is coming from smaller, deeper, tougher fields. Oil from the Bakken needs sustained prices north of $70 to be profitable.
Second, the world’s big oil exporters are not about to let the price of oil slump for long. Sure they might open the spigots to replace oil that gets knocked off line in Libya or Iran. But they need higher prices to balance their budgets. As Bernstein points out, even at $125 per barrel for Brent crude, 8% of big oil producers ran a budget deficit in 2011, while at $90/bbl 58% would be running a deficit. The big producers, especially those likely to feel the continuation of the Arab Spring, will not hesitate to cut output in order to keep prices pumped up. To keep from getting overthrown they’ve got to spread the wealth around among the citizenry.

The other argument is they might open the spigots and sell as much as they can, and that has some weight because except for Saudi that is what has happened in the past. NB Iraq might well cost $20 but its still down at the (about) 3mbpd mark...
The marginal $92 will go up, cant see there is much of an economy left in that case that can pay that.....I wonder when those economists who refuse to see that impact will finally get it.
Also the oil price has dropped quite a bit but is now stable, at $85. Im wondering if this is the "true" price with speculators all exited....pretty close to that $92...

A few months back columnist Margaret Wente authored a piece in a Canadian newspaper titled The shocking truth about electric cars. Among her comments:

The fantasy that electric cars are right around the corner doesn’t survive even the most cursory reality check…consumers simply won’t pay a $20,000 premium for a vehicle that doesn’t go very far, isn’t very convenient, and runs out of juice as soon as you turn on the air conditioner.

And then, as she says, there’s another problem:

Electric vehicles require large amounts of electricity – so much that Toronto Hydro chief Anthony Haines says he doesn’t know how he’d get it. “If you connect about 10 per cent of the homes on any given street with an electric car, the electricity system fails,” he said recently.

I cant see EVs either, not for me and I suspect most ppl. Right now a Mits MiEV is $65kNZD and a life of about 10 years I couldnt dream of buying one. Its petrol equiv is $20k and has a life of 20 years....so that difference is 6 times more. "consumers" will of course have to pay that premium or not have a car....hence I for one wont have a car.
EVs though are not as bad as she paints it in terms of "very far" or "convenient", ie most commutes and shopping sprees are comfortably within present battery tech and instead of the in-convenience of stopping at a petrol station to fill up you plug it in the wall at home or at the company car park, takes a few minutes I myself would prefer that.
The grid can be adapted to meet EVs but that would take say wind. Most ppl are home by 7pm and dont need the car for 12 hours so a slow or intermittent charge as and when wind can supply it means load matches supply or other things like tide will work in NZ. Some of the comments PDK and I have been making for quite a while are we need to start adapting the systems we have so we dont have such failures.....falling on deaf ears though, so failures and high prices is what we will see.
That piece is pretty biased and mis-informed if not a lie btw. I mean consumers wont stand for it, yeah right, so the consumers choice is get a EV or pay the price of petrol, and the rub is, if you can get it......So the WFFs fanatsy v the so called journalist's fantasy well both are wonky.
regards

I spent some time reading the comments on the link - choose the best rating to get an idea of how Canadians view the practicalities of EV's. The journalist has a huge amount of support. EVs in Canada are a winter death trap.

As far as wind turbines providing intermittent power to charge EVs in NZ there is only one way to do that - have an entirely separate grid for that purpose alone. Ain't gonna happen.

I've pointed out to you before that to balance the intermittent wind proposed would require one third of the hydro system to be set aside to make up the difference. That's the unvarnished truth and the BAU green fantasists believing we'll all trot around in EVs will cause a disaster.

OMG, its simple really, engineering wise you are obviously clueless. We are in such a thing as caught between a rock and a hard place. On the one hand we have ppl who dont want to accept lifestyle changes, mostly BBs. Thats Ok to an extent, the minus side is the huge cost that will entail, if ppl are prepared to pay all well and good, for the rest of us who dont want to or cant afford to, we will have to live differently....as will our children.
Wind turbines and EVs no there isnt, you can do it today off the same grid....maybe you have never noticed that the power company can switch off the hws cylinder if they want to with 40 year old tech....Besides that right now Im looking at something called a raspberry PIhttp://www.raspberrypi.org/
So for $35NZ and broadband you can control about 17 directly connected items....it does wireless so really the number of items are almost limitless...EV with a wifi link to is, easy.
Canadians yeah sure I can see EVs in the cold are not very practical, so really its going to be down to some hard choices, pay or move.
1/3rd balance with hydro, yes its known as resiliance....when it comes down to considerations for making sure your economy can survive then you want alternatives which gives you resiliance. Im a Greenie in a way and I have no illusion that EVs are not going to happen. Too costly in every sense of the word, so the other side of that is have nothing....public transport, push bike, maybe an electric scooter....lifestle changes....a good resaon to see and understand why American suburbia is doomed.
This isnt what I would call a journalist....a PR spinner, decietful and immoral, yes....maybe deluded.....but I find that hard to believe.
regards

OK I'm not going to descend to your level of rudness, but since you raise the issue of being able to switch off hot water cylinders, I'd be very interested in how

1 you identify who is charging an EV and who is running their microwave.
2 you manage fluctuations from minute to minute.
3 you decide whether Auckland or Southland is switched off - a political decision?.

Do you have a team of inspectors cruising the streets, a licencing sytem for EV owners?

Wind turbines do not provide baseload and never will. I repeat - for the planned wind farms one third of the country's hydro would need to be set aside just to compensate, and since wind speeds are at their lowest , often non existent, during winter evening peaks you also have the intractable periodic problem of low lake levels at the time of highest demand. The wind industry is now pushing gas to compensate for the intermittency.

Im afraid yes you are without the "information you need shall we say" The biggest thing though is you seem determined to hobble yourself with a set of blinkers, so will remain so, your choice.
HWS, easy right now, back in the 80s part of the automation systems I had to manage has mains fed signalling/control system. So at the low pressure side of the site(s) transformers we had a system that squirted a control signal into the mains power....this allowed us to control the heating system. In my power board there looks to be a simialr system and written into my power contract is the agreement for the power company to interupt the HWS heating....
Lets take this further with a rasberry pi at $35NZ....it has 17 general i/o (input / output) channels, 2 x usb so storage and wifi...and tv out , LAN so broadband connection....hdmi,
"The SoC is a Broadcom BCM2835. This contains an ARM1176JZFS, with floating point, running at 700Mhz, and a Videocore 4 GPU. The GPU is capable of BluRay quality playback, using H.264 at 40MBits/s. It has a fast 3D core accessed using the supplied OpenGL ES2.0 and OpenVG libraries."
so the tv is the video monitor and runs off a usb mirco (5volt) cable...supplied from the TV....fits in your hand.
Buying a blueray player? buy one with a rasberry PI built in, or even a TV....trivial....
If you want to look at some of the cool tech you can do,http://www.raspberrypi.org/ some good videos there.
The board is shown here...http://www.raspberrypi.org/quick-start-guide
Anyway
The unit has a 17 i/o or 8 and a serial channel....let alone wifi which makes devices limitless.
17 general i /o means I can measure and control 17 physically connecteded things...all from my arm chair watching the TV.
Say I have 6 main rooms in my house....and 6 electrical panel heaters...12 channels gone....individually controllable rooms....So I can take a wattage unit that sends pulses another channel.....outside air another channel..14 ios, 3 left.....wind say?
I could have a second PI and do all the lights automatically.....no movement for say 15mins, switch off.....detect movement and monitor light levels, switch on....
Still have all the usb connected devices.......and wifi.
HP and a few others 5 years ago were talking about fridges with IPv6 (limitless networking) connectivity....each device created has a IPV6 address.....10s of billions....so yes you can control your fridge and microwave.......
HWS, I'd need a 20amp 240v relay, small box to hold it and a <$1 per metre control cable....include a temperature gauge on the hws cylinder wall.....50cents and another cable length....the hardest part for me is the raw programming.
Pretty much all I have described so far was the "future" 10~15 years ago, what stopped me then was a unit to do it was 1300sterling.....about $2kNZD.....now its $35....a trivial cost.
In terms of who, thats the power put into ppls hands and the incentive is the cost of power....quite a number of ppl now buy off powershop. Want to charge your EV at 6pm, cost $1 a KWH, at 2am, 10cents, your choice. There is also a community project going where ppl install their own weatherstations on the internet, you can go look at their data, allows you to plan...if you have wind, charge....or get the power companies to advertise their power per minute....you buy off the cheapest....when you want....you have broadband to connect to them.....
Hydro v wind yes I know quite well the load issues....what you refuse to see is that we need resiliance as much as low cost....no point in having power at $5cents if a hydro station goes off line and we sit in the dark and wait....then Im sure you'd be screaming for power even at $1 per kwh.
Gas fired, no irony, its a gas turbine to do peak lopping...standard tech from 20 years+ ago, I helped to install a 4mwh one in the hospital at the time, 12million sterling contract, paid for itself and a replacement unit in < 3 years as we sold the excess back to the London power board, they loved it as they didnt have to pay the 4% transmission losses, we also had steam driven absorption chiller units, we cooled the hospital for "free" in the summer. Gas has the lowest CO2 output per kwh....and lowest other nasties unlike say coal btw.
Right now of course you miss the biggest change, lifestyle...our lives will change to work around the limitations of power/energy available in the future, there is no choice, nature will do it to us.

Coal supplies 42% of global electricity, and rising. It has no re-passed oil as the No1 energy source globally. A big step forward, not. But that's what electric cars would be; 50% coal cars, even if the extra could be found.

The marginal barrel is the one, though. You can argue that if you took the speculation out of it, the swings wouldn't be as quick or as extreme, but there's still that point at which global BAU can't cope.

Re Manufacturing - isn't that what we've been saying here? The real vs the virtual?

Incentivise people to produce their own power with feed-in tarriffs and a simplification of parasitic council regs relating to micro-generation
electric motors produce 100% torque from 0 revs, so are potentially very exciting, and are potentially fairly simple devices......but you need a lot of early adapters to pay over the odds to get the cost down.....

Stupid? Really?
The petroleum distribution system has been in place for more than a century and is paid for. The move to EVs, even though we agree this will never happen for a whole host of reasons, will still however cost billions of dollars in infrastructure to benefit a handful of people who can afford EVs.

Pensioners and non EV owners - you - will be subsidising the owners of these trendy toys through a massive increase in the cost of electricity. The EV owners contribution by way of their own private infrastructure - say PV systems - would be one way of eliminating some of this massive expenditure.

All this at a time when the country becomes increasingly insolvent and faces a potential depression. And what will that do for electricity consumption? You work it out steven.

The entire petrolium industry is rusting away....so actually a double whammy, we will pay twice, the first to keep it going while we move off it and the second cost will be building "something" we will be moving to....
In terms of EVs and costs, hence why Im saying we can give ppl the power to control what they use and when....I owuld expect that the few owning an EV will be paying masssively for the privaledge, its not hard to do that today....we just say per person you have 4000 kwh hours at a nominal 20cents a go per year. When you exceed that it starts to ramp up, say have an EV and use 6000 kwh per year well thats 30cents per kwh above 4000, get to 8000 kwh and its 40cents per kwh, you dont need a second set of infrastrusture...
A very probable Depression will drop consumption as it has now flat lined with a recession.....I dont need to work it out...
I really dont fathom your thought processes....you make no sense, you assume I or others have not already thought of or through the things that you have come up with, that mostly isnt the case.
Sure suggest things but dont be surprised if we have not already considered it. For instance lifestyle changes, if we in Wellington use tidal then in the future it may well be our works hours and lives revolve around the times of the tides...and not 8 til 5...You see most pl are deluded that their lifestyle isnt up for negoitiation.....trouble is nature doesnt negoitiate.
regards

A requirement would be to turn the lights off after use...dear...
Even more so with EVs than today's fiasco, when the boss took her Charade to town.
Strange that the 1983 version had a warning buzzer when you switched orf the engine... and the latest vesion does not.
Ah...progress.

Andy Xie is an interesting character.
He used to work for Morgan Stanley but got fired in October 2006 after he went to a meeting with some of the world's bigwigs and wrote an email about it which then got leaked.
Some of the contents:-
"These western people didn’t know what they were talking about. Aside from the nauseating pleasantries some useful information came out of it."
"Actually, Singapore’s success came mainly from being the money laundering center for corrupt Indonesian businessmen and government officials. Indonesia has no money. So Singapore isn’t doing well. To sustain its economy, Singapore is building casinos to attract corrupt money from China."
"Larry Summers and Paul Volker (sic) were very worried about the US economy. As you probably know, Alan Greenspan is talking the same way. At the CLSA conference last week, he talked like one of his critics. There is fear of a US collapse."
The Emailhttp://www.littlespeck.com/content/economy/CTrendsEconomy-061005.htm

"These western people didn’t know what they were talking about."
Yes we know Kiwi.....the level of contempt by the Communists is evident in their condescending behavior and flagrant disregard for the rule of law......but thanks for the heads up anyway ....I know you meant well.............................tui.

Kiwi please indicate where I said He was...? I think you will find on a second read , that the line he used , is a view,( I believe ) held widely by our new best friends who happen to be Communists...that ok with you..?

Bingo..! give that dude a cigar....as to what Andy's political leanings are I do not know first hand , I do know however he believes in the redistribution to the people, of export wealth amassed by China.........i also know I have a collection of his pieces as far back as 96/7 and he always delivers food for thought , plus has made some faily accurate predictions in his time.........
Are we done here yet...? because this is a tiny bit anal.

#5
the wealth of China's 'princelings', the children of the revolutionary leaders of the 1940s, 1950s and 1960s.

Sounds like NZ. The BB's spent their wealth on their babies and they turned out to be spoilt, winging, winning, brats. The biggest sin of the BB's was spoiling their kids, showering them with everything they wanted.

Of course, acording to these kids
They own none of the debt, how can they? they don't have credit cards, they don;t have hire purchase, they don't have any debts, it's all someone else's so why should they pay for it.

#9
Up til the 70's, debt-to-GDP grew more slowly than industrial production. That is healthy and sustainable.

On #1 Bernard.... Even though China is reporting low inflation at present, it's not how people feel. ........facinating, we feel that too Beijing then instituted a credit expansion that revived the bubble. It convinced speculators the government had the ability to revive the bubble at any time, so many doubled down and borrowed massively........facinatingThe whole value chain in finance ultimately depends on land appreciation to survive. There is no return in the real economy to support such a vast and speculative financial sector. But, the land market has collapsed. ....facinatingTrying to revive the bubble now will only crash the economy. There is no other way out this time........Big call Andy
So all in all Andy the Communists may yet, not rule the world...eh..?
The Fed will continue to balk at QE3 Bernard or at least a broad spectrum injection for many of the reasons outlined in Andy XIE's commentary here....now isn't that a bit facinating...?

"we"......dont put me in there.....I look at things going up and things going down....net difference, yes about 2% inflation....most ppl only look at CPI however...."this week tomatoes went from $4 to $8 a kilo, we are f***ed, buy gold!!!!!! run for the hills!!!!!'
uh no.
No communists I can see, anywhere, maybe cuba....
regards

Steven , I would never presume to include your good self in a "we" or wee for that matter...! you are definately not a part of the we the people......
As to the " no sign of Commies."......you really need to get out more,.....no you really really do.
That said good luck to you as always...and stay well.

Troy she was refering to Mongolia as a model...and clearly the swipe was at China.....but they have more probs at the mo than getting into a slanging match with Hilliary...... maybe they should just send her a box of cigars ...or something ,Idon't know..

That is the very problem of a rigged game Mandalay........it becomes a question of tick which box offends you the least.....while offering ...." none of the above"... as an option box , leaving those who do not vote in protest effectively reinforcing the majority of the incumbent.
Low voter turnout usually = No change
High voter turnout usually =Change
the change however usually = No change
And so you can see the effectiveness of stacking the deck.

Of course we are talking only about flaws in representative democracy. Nobody needs to think that this indicates a failure of actual democracy, opinion polls usually indicate how un-democratic the representative system is, not how the population have selected the policy they want.
Also there is a lot more to democracy than just the selection of who makes the rules. When was the last time you had a say in reserve bank policy? international treaty negotiation?
In a more democratic set of rules I think a lot of these decisions would not even be considered by who ever is elected head of state at the time.

How China really works.
We know that the UK Banksters and the politicians are totally corrupt. The regulators are probably corrupt as well as they have long known about LIBOR rigging. Why are they picking on Barclays when all the Banks were doing it? Why start a scandal now? Who are the winners and losers? The only institution we have left is the media who just love to tell the truth about everything and would never lead people up the garden path. Yeah right.
Interesting that the ft article has lots of unattributed quotes. Thats usually a warning sign that someone is making stuff up.
ft.com needs to do an expose called "How the UK really works".

Does it make you uncomfortable...Kiwi...the C word I mean, because I'll stop using it if you think it's a bad thing to call someone......
I think many C people are happy to be C people, I just find it a little curious why Western Administrations like to leave the C out when they refer to their dealings with China......is it because it makes them a little uncomfortable...? Is it because after all the billions they wasted on kicking the crap out of C people, they now rely on them.....
Maybe somewhere back in the day you missed my point, I got nothing againts C People governing their own affairs and propagating their doctrine......on their own turf.
The hypocracy here lies with us.

Now that was a thoughtful post.
i actually have never really studied Marx or communism. My current understanding is that the Russians are really upset that Marx enslaved their Country for so many years. They like to point out Marx and all those sorts actually came from the West, so they are not that impressed.
Whether a Country is good or bad seems to depend on the mindset of the individuals running it rather than pure ideology. Its not a black or white thing.
China seems to have a lot going for it at the moment and I think we should take our opportunities when they come.
They seem to be really good at building ghost cities. We should have accepted their help rebuilding Christchurch. The problem is that the people in power in NZ are not sleeping in cars, otherwise this would have been an easy decision to make.

Marx was Prussian...Kiwi...did stints in France...London and so forth but definately lower Rhine....a German of that period ....
Marx influence on Maoism was not the be all end all for Mao, however the doctrine of Maoism was, and is still the guiding ideology of The CPC despite the so called sweeping reforms of Deng to safeguard against revolutionary activities from their own people.

Im curious, have you actually studied anything, as in something you are commenting on? because commenting that russians dont like marx when really totalitarianism russian style enslaved their country is more than a little, mis-guided shall we say....
China is looking more and more like a basket case every day btw.....or maybe a powder keg is more apt.
Chch, well problem solved, lets ship everyone there over to a ghost city....
regards

A long long time ago there was a Berlin wall that fell, after that the Soviet Union broke up and communism became discredited. Western capitalism became the answer and many experts, including some from NZ went to Russia to try and start a new system based on capitalism. However they were a bit too idealistic and didn't think things through and Russia ended up with a system of Oligarchs.
I thought Marxism and communism was dead, but maybe its not. I get inklings every now and then through posts that maybe Marxism isn't dead. People seem to want to defend Marx for some reason, without actually coming right out and saying so.

Hasn't capitalism ended up with it's own Oligarchs? "Aristotle pioneered the use of the term as a synonym for rule by the rich,[4] for which the exact term is plutocracy, but oligarchy is not always a rule by wealth, as oligarchs can simply be a privileged group, and do not have to be connected by bloodlines as in a monarchy" - Wikipedia"The iron law of oligarchy is a political theory, first developed by the German syndicalistsociologistRobert Michels in his 1911 book, Political Parties.[1] It claims that rule by an elite - or "oligarchy" is inevitable as an "iron law" within any organization as part of the "tactical and technical necessities" of organization.[2] Michels particularly addressed the application of this law to democracy, and stated: "It is organization which gives birth to the dominion of the elected over the electors, of the mandataries over the mandators, of the delegates over the delegators. Who says organization, says oligarchy" http://en.wikipedia.org/wiki/Iron_law_of_oligarchy"Marx's theories about society, economics and politics—collectively known as Marxism—hold that all societies progress through the dialectic of class struggle: a conflict between an ownership class which controls production and a lower class which produces the labour for goods. Heavily critical of the current socio-economic form of society, capitalism, he called it the "dictatorship of the bourgeoisie", believing it to be run by the wealthy classes purely for their own benefit, and predicted that, like previous socioeconomic systems, it would inevitably produce internal tensions which would lead to its self-destruction and replacement by a new system, socialism."
Whether capitalism is replaced by socialism, who knows but it seems he was on the money re the internal tensions. Look around with your eyes wide open and we can see that capitalism has truly morphed - Dr Jekyl into Mr Hide.

Marxism to me brings to mind concepts like indoctrination, revolutions, methods for winning the class struggle. Lots of underhand, secretive, chilling stuff, the opposite of freedom.
Marxism, the AK47 and the freedom fighter had lots in common in days gone by.

The world would have been a better place if we had just skipped the cold war ideological thing and gone straight to development. Africa used to be a battleground between capitalism and marxism and countless millions suffered for it. China is doing the right thing now, they don't really care what a countries system is, they just know that economic development is good for everyone.

Like the blood diamonds coming out of Zimbabwe... Sponsored by Chinese government banks.... You are so busy reciting your pro China rhetoric, you can't see the word for the trees! Nor the blood for the money!

General did you have anything to do with starting wars over in Africa during the cold war era? Those wars were fertile breeding grounds for enabling the break down of states and the blood diamond trade.
You are so busy reciting your cold war rhetoric that you can't see the wood for the trees.

Sigh! This is NOT Cold War rhetoric... China is doing this now, right now, today, this very minute, this second, as I type this on my Android phone, with its pathetic predictive text.Use your wikipedia and do some more of that 'hardcore' investigation and have a look.
You fail hopelessly in your attempt to re-rhetoric me... Your pro-China spin is classic youth indoctrination 101. You really should do some more traveling without the red tint of the PRC clouding real world reality! Maybe try a different forum too, as NO ONE on this site seems to be falling for your argument that "everything China is all good, all the time!" Hard to believe I know, but sadly for you, true...

Gandhi became famous by fighting for the civil rights of Muslim and Hindu Indians in South Africa, using the new techniques of non-violent civil disobedience that he developed. http://en.wikipedia.org/wiki/Mohandas_Karamchand_Gandhi
Seems like he left the world with the concept of non-violent disobedience. A good guy.

It's a nice thing that you have the thought processes of a pacifist Kiwi.....however you have steered the conversation away from Maoism /communism to Marxism......why is that , so we do not discuss Mao....?
How many deaths Kiwi....ballpark it attributed to Mao...?
China is not in Africa to demonstrate the levels of their benevolence , so please don't continue with the insults to intelligence....
Anymore than the U.S. is in Africa for the same reasons ,,,,before you mount that horse.

Maoism has fallen out of favour within the Communist Party of China, beginning with Deng Xiaoping's reforms in 1978. Deng believed that Maoism showed the dangers of "ultra-leftism", manifested in the harm perpetrated by the various mass movements that characterized the Maoist era.http://en.wikipedia.org/wiki/Maoism

Kiwi do you actually read my responses to you...? I covered that already above , but Dengs motives were to pre-empt any revolutionary thoughts/ values held by his own people.
Sweeping reforms were to distance the party from accepting the revolutionary will of the people as being acceptable any longer....a case of he who lived by the sword shall now put it down and comply for the greater good as we see it.

Kiwi ...think for yourself..it's not that complicated and your sense of reason right or wrong will have improved.........
I gotta go do some stuff...you know drink n such.....Cheers I'll have on for you.